Driving Growth with D2C - Defining Your Brand through Data & Experience - Ogilvy
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Driving Growth with D2C Defining Your Brand through Data & Experience
Executive
Summary
T hink that Southeast Asia is immune to
the digital commerce transformation?
Think again.
The rise of digital commerce is already
transforming how customers shop in the
region, and the trend is accelerating. Brands
need a direct-to-consumer digital strategy
to come out on top of this disruption and
lead the market in the future. That is because
D2C offers you more intimate and resilient
relationships with your customers so you
can create more insightful and effective
brand experiences that set you apart from
competitors.
Dri vin g Gro wth with D2C
2 D e fining Your Brand t hrough D at a & Experien ce
Online purchasing has been slower to catch on in Southeast Asia than markets such
as China. But last year, the pandemic significantly increased the adoption of digital
services in Southeast Asia. New technologies, new platforms and new consumer
expectations are all on the rise, and brands in Southeast Asia should prepare for a ripple
effect of changing habits with wide-reaching impact across all sales channels.
Today, online shopping marketplaces like Shopee and Lazada are driving digital
commerce penetration and leading online customer experience trends in the region.
But looking ahead, dependence on marketplaces for your digital commerce strategy
will come with rising costs, not to mention losing ownership of an increasingly precious
asset: customer data.
Dri vin g Gro wth with D2C
3 D e fining Your Brand t hrough D at a & Experien ce
D2C gives you the ability to adapt nimbly For some brands, creating a competitive
to changing customer expectations and D2C offering will require a significant
offer them a unique experience that overhaul to how they work. While this
sets your brand apart. Perhaps more opportunity cost could be seen as a
importantly, D2C provides ownership barrier in one view, catalyzing innovation
of invaluable customer data to help you and increasing your ability to connect
innovate and personalize your offering with and learn from customers online is
based on data-driven insight into your perhaps the most important reason to
customers’ expectations and behavior. start investing in D2C today.
D2C provides ownership of invaluable
customer data and lets you provide
unique experiences that set your
brand apart.
D2C gives brands a long-term edge by
placing customer-centric innovation
at the heart of how your company
operates. Adopting a D2C strategy now
will make sure your band keeps control
of your customer data and customer
experience. Holding off only imperils your
brand’s future.
Dri vin g Gro wth with D2C
4 D e fining Your Brand t hrough D at a
& E xper ie nc e
3 Pillars of D2C Advantage
Here are 3 major advantages to D2C that explain why accepting
the short-term challenges now will pay off hugely in the long run.
D2C creates unique online shopping
1 experiences for brand differentiation
» Personalize customer experiences with services and communications
tailored to their needs
» Customize shopping experiences to your brand and category and stay
true to your brand value online
» Integrate digital commerce with social media for effective influencer
and brand advocates campaigns
» Make any touchpoint where your customers are connecting shoppable
D2C empowers ownership
2 of your customer data
» Gain intimate knowledge of your customers and invaluable insights
to drive your innovation strategy
» Design customer experiences with a data-driven edge
» Giving data away to marketplaces could empower competitors with
insights about your customers
» Acquiring data from third parties will become more limited with
increasing privacy concerns
» Customers are more likely to willingly share data when they get a better
shopping experience in return
D2C drives necessary
3 brand leadership
» Make data and technology the priority for your organization
» Integrate your digital commerce team with people from across all
functions
» Adopt an agile management system to run small microservices
teams in parallel
» Recruit top tech talent with a growth mindset to roll out new functions
» Implement a “headless” commerce system where your backend digital
commerce API will work with endless user touchpoints or “heads”
Dri vin g Gro wth with D2C
5 D e fining Your Brand t hrough D at a & Experien ce
The shift to D2C starts with a change
in mindset. No category is immune to
the influence of online buying.”
~ Waheed Bidiwale
In 2016, Perfect Diary cosmetics launched in China. By 2019, the brand had risen to
become the country’s third best-selling brand. In their 2020 IPO, this start-up earned a
valuation of over $7 billion USD.1
How did a new cosmetics company so quickly topple established competitors? By
going direct-to-consumer, Perfect Diary was able to move faster, connect closer and
communicate smarter with customers.
These days even established brands must move fast to stay ahead. When the pandemic
hit, Nike saw nearly every offline store that sells its merchandise close in China. But the
brand still managed to post 5% revenue growth there, because Nike was ready to react
with direct-to-consumer sales. In the third fiscal quarter of 2020, Nike’s digital sales
jumped more than 30% in China2. Globally, Nike’s direct-to-consumer sales grew by 142%
between 2015 and 2020, and the brand aims to achieve $16 billion USD via this channel
in 20223.
The rise of digital commerce will have an impact on the entire global marketplace, and
once this trend hits, your business having a strong digital commerce strategy will put you
at an advantage.
1
https://www.businessoffashion.com/news/beauty/c-beauty-giant-yatsen-raises-617m-in-ipo
For additional stats about the brand https://www.businessoffashion.com/news/china/perfect-diary-parent-sees-
net-revenues-rise-717-in-q4
2
https://www.nasdaq.com/articles/3-reasons-why-nike-can-overcome-the-coronavirus-crisis-2020-03-29
3
https://www.sqli-digital-experience.com/en/blog-en/brands-are-taking-back-control-with-the-emergence-of-
direct-sales-d2c-in-asia
Dri vin g Gro wth with D2C
6 D e fining Your Brand t hrough D at a & Experien ce
That is why brand leaders of the future your business. Today you might not be
are investing in direct-to-consumer doing anything amiss, but tomorrow you
digital commerce. It is critical to build could lose out unless you are ready to
resilient, direct online relationships with react at the speed of your customers—or
customers now in order to future-proof even outpace them.
Digital Commerce is Rising
in Southeast Asia
In China, digital commerce is already an important source of
sales volume.
By the end of 2021, China will become the first country in
history to transact more than half (52.1%) of its retail sales
digitally via digital commerce4. Currently, 45% of the world’s
digital commerce transactions take place in China5.
In Southeast Asia, online purchasing has been slower
to catch on. But new technologies, new platforms and
changing consumer expectations are accelerating the
process. With powerful Chinese tech companies investing
in digital commerce in the region6, Southeast Asia is on track
to eventually follow in China’s footsteps. The opportunity is
nascent, but brands that invest now will be in a position to
reap significant rewards.
4
https://www.emarketer.com/content/global-historic-first-ecommerce-china-will-account-more-than-50-of-
retail-sales
5
https://www.mckinsey.com/~/media/mckinsey/featured%20insights/china/china%20still%20the%20worlds%20
growth%20engine%20after%20covid%2019/mckinsey%20china%20consumer%20report%202021.pdf
6
https://www.techinasia.com/diving-alibaba-tencents-bets-southeast-asia
Dri vin g Gro wth with D2C
7 D e fining Your Brand t hrough D at a & Experien ce
There are 400
Total Internet users in SEA
million internet
users in Southeast
Asia, and 70%
of the region’s
population 2015 2019
= 10M People
2020
is now online. Source: e-conomy SEA
Last year, the pandemic significantly increased the adoption of digital commerce and
related digital services in Southeast Asia. Internet penetration, digital payment and
consumer trust in digital commerce all rose significantly in 20208. The region’s online
industry is poised to triple to $309 billion USD in gross merchandise value by 20259.
% of new digital consumers out of total service consumers (SEA aggregate)
55%
47%
44%
37% 38%
34% 34%
32%
30%
Food Delivery
Electronics
Education
Groceries
Apparel
Beauty
Music
Loans
Video
e-Commerce Online Media
Source: e-conomy SEA
7
https://www.bain.com/globalassets/noindex/2020/e_conomy_sea_2020_report.pdf
8
Ibid
9
Ibid
Dri vin g Gro wth with D2C
8 D e fining Your Brand t hrough D at a & Experien ce
1 in 3 of all digital services users
in Southeast Asia were new due to
COVID-19, and 94% intend to
continue their newfound habits post-
pandemic.10
% of new digital consumers out of total service consumers (SEA aggregate)
41%
37% 37%
36% 36%
30% 30%
Indonesia Malaysia Philippines Singapore Thailand Vietnam SEA
Source: e-conomy SEA
The cash-as-payment method fell from 48% of transactions to 37% in 2020. In
comparison, e-wallets rose from 18% to 25% in the region.11
In Southeast Asia, online marketplaces like Lazada, Shopee and Tokopedia are investing
heavily to drive the penetration of digital commerce. Shopee financial reports indicate
that their turnover for 2020 was $35.4 billion USD, double that of 2019, and accounting
for 57% of the entire Southeast Asian digital commerce market’s transaction volume.12, 13
10
Ibid
11
Ibid
12
https://www.businesswire.com/news/home/20210302005582/en/Sea-Limited-Reports-Fourth-Quarter-and-
Full-Year-2020-Results
Dri vin g Gro wth with D2C
9 D e fining Your Brand t hrough D at a & Experien ce
These platforms are luring and monetizing shoppers by enriching the shopping experience
in new ways. For example, making shopping more social with livestream video platforms
like Shopee Live where users watch KOLs and shop online at the same time, and making
shopping more engaging with gamification tactics such as collectable vouchers, daily
bonuses, and prize giveaways. Tim Till, Vice President of Presales Consulting—Technology
for Ogilvy notes that these trends will continue to evolve and consumers will continue to
grow in their engagement with marketplace platforms and social-based commerce.
“In Southeast Asia, social media penetration ranges from approximately 60% in Indonesia
to 90% in Malaysia from early 2021,” says Till. “Referral-based commerce with influencers
may see an increase as the sophistication in payments to those influencers matures.
A growing consumer base, including unbanked individuals will increasingly be able to buy
online as individuals and businesses become able to receive payment and pay through
new and developing methods such as crypto currency, buy-now-pay-later, e-wallets.”
Combining the use of social media
with digital commerce will be a lever
to capture the increasing number of
digital shoppers.”
~ Tim Till
Some categories are feeling the impact of digital commerce more quickly than others.
For instance, the online share of sales made in the health and beauty sector globally is
expected to rise from 16.5% as measured at the end of 2020 to 23.3% by 2025.14
14
https://www.warc.com/newsandopinion/news/e-commerce-to-dominate-future-of-health-and-beauty-
sector/44002
Dri vin g Gro wth with D2C
10 D e fining Your Brand t hrough D at a & Experien ceTop 10 global online retailers by health & beauty ecommerce gross sales
pre vs post COVID-19 2020, (USD bn)
50%
2020 Pre-COVID 2020 Post-COVID
43.2
45%
40.5
40%
Retailer H&B share
of ecommerce X%
35%
sales, Post-COVID 2020
28.8
30% 26.8
25%
20% 16.8
16.0 15.5
14.5
15%
10%
5% 3.2 3.5 3.0 3.2 2.8 3.0 2.7 2.8 2.7 2.9
2.2 2.3
0%
Alibaba Amazon Pinduoduo JD.com eBay VipShop Suning Shopee Walmart Rakuten
Group Commerce Group
6,1% 6,2% 6,0% 6,1% 4,1% 18,1% 5,5% 15,9% 4,9% 6,0%
Source: Edge by Ascential, 2020
Data sourced on 25 June 2020: Variations may occur on data sourced from the database after this time.
Top Online Shopping Categories Worldwide in 2021
Fashion $759.5 billion
Toys, Hobby & DIY $590.7 billion
Electronics & Media $542.4 billion
Food & Personal Care $468.5 billion
Furniture & Appliances $362.9 billion
Source: Statista.com
But this is only the beginning. The digital commerce trend will eventually accelerate from
lifestyle to the entire gamut of products and service categories, according to Waheed
Bidiwale, Global Vice President for Verticurl, Ogilvy’s Delivery and Operations Center.
Dri vin g Gro wth with D2C
11 D e fining Your Brand t hrough D at a & Experien ce“Not many thought of buying toilet paper online before Covid,” says Bidiwale. “Brands
that are thinking ‘I’m in a commodity business, or I am in the impulse purchase
category or nobody buys a car online so I don’t need digital commerce need to relook
at their strategies.”
The question is not if digital commerce
will disrupt your business but when,
and how well your brand is prepared.
Digital Commerce Will
Change Your Relationship
With Customers
Trends like rising digital intimacy will have a significant impact on the value of packaged
goods brands in the region, according to a report by McKinsey.15 This population skews
young, creating a cohort of digital natives with a higher acceptance of online services
and innovation.16
According to Jeremy Webb, Vice President for Customer Engagement and Commerce
in Southeast Asia at Ogilvy, brands in Southeast Asia should prepare for digital-first habits
that will influence other sales channels. Southeast Asia is already a region that demands
adaptation to a fragmented customer journey inclusive of very advanced middle-class
shoppers in big cities, as well as rural hard-to-reach shoppers. When these customers go
online, the journey only gets more complicated.
15
https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/defending-southeast-asian-
consumer-company-value-in-a-digital-age
16
https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/technology-media-telecommunications/
deloitte-cn-tmt-inclusion-en-200924.pdf
Dri vin g Gro wth with D2C
12 D e fining Your Brand t hrough D at a & Experien ceThe question is not
if digital commerce
will disrupt your
business but when,
and how well your
brand is prepared.
Dri vin g Gro wth with D2C
13 D e fining Your Brand t hrough D at a & Experien ceKelly Goetsch is Chief Product Officer at
commercetools, a leader in the commerce
At The Lego Group,
platform and technology software space.
we are keen to build
In his view, the pace of adoption and
stronger connections innovation of marketing technologies will
and conversations with increase, and digital commerce will be
our shoppers by creating critical for brands to take advantage of
seamless experiences new opportunities globally.
across our digital
ecosystem powered by “As an example, in the future Apple may
our first part data.” enter the virtual reality space with VR
glasses,” says Goetsch. “Let’s say you look
~ Nitika Nagpal at someone while wearing these glasses,
Brand Director, Lego UK and you like something they are wearing.
Because of an auto tag on the product,
“What we’ve noticed about Southeast a price tag will drop down in augmented
Asian consumers is that they visit a lot reality, and you will be able to immediately
more touchpoints before they make purchase that item.”
their purchases,” says Webb. “It’s a more
connected, more complex journey. We
are seeing a lot more behavior to browse
offline and buy online, and vice versa, with
We’re looking at
a trend towards ‘web rooming’ or online a future where
showrooming your products to influence every moment is
choices.” shoppable with
the right digital
services.”
~ Kelly Goetsch
Dri vin g Gro wth with D2C
14 D e fining Your Brand t hrough D at a & Experien ceThe pandemic has shown us how quickly customer
needs can change and demand that brands adapt fast
online.
“For instance, during the Covid-19 lockdown, many
retailers had to quickly deploy distributed order
management and curbside pick-up capability when
their physical stores closed,” says Till. “Those who didn’t
have efficient DevOps, RunOps and flexible technology
were generally unable to adapt quickly and execute
even satisfactory consumer experiences.”
The implication of digital commerce is that brands
need to provide a competitive online shopping
experience to meet fast-evolving consumer
expectations and protect brand value. It’s time to
invest now and get ready to recruit the next generation
of shoppers online before your competitors do.
Your customers’
online habits and
expectations are
changing, whether you
know it or not.
Dri vin g Gro wth with D2C
15 D e fining Your Brand t hrough D at a & Experien ce3 pillars of D2C
advantage D2C is Your
Here are 3 major advantages
to D2C that explain why
Digital
accepting the short-term Commerce
challenges now will pay off
hugely in the long run Advantage
With digital commerce at such an early stage of
1
growth in Southeast Asia, why start investing in
direct-to-consumer now? Why not simply set up
D2C creates unique
shop on a marketplace platform?
online shopping
experiences for brand
differentiation As mentioned earlier, marketplaces like Shopee
and Lazada are driving digital commerce
penetration and leading the market in customer
engagement trends, such as mobile-first
2 interaction design, live streaming apps, hyperlocal
promotions and AI-driven personalization.17
D2C empowers They are providing fast, early gains by spending
ownership of your a lot on new customer acquisition, creating a
customer data large audience for brands and significant short-
term ROI. These are benefits to working with
marketplaces that should not be ignored. But
3 to rely on them for your long-term online sales
strategy is probably a mistake.
D2C drives necessary
brand leadership
17
https://www.businessinsider.com/shopees-digital-inclusion-
strategy-e-commerce-growth-in-southeast-asia-2020-
11?IR=T
16Firstly, the advantages that marketplaces provide now might not be sustainable in the
future. Eventually brands will have to pay the price.
“After the big volume gains, the cost of being on those platforms will grow,” says Webb.
“For example, there’s an emphasis on pay-to-play: a need to buy advertising in order to
generate traffic on the site. That’s how they monetize. There’s very little organic reach
already on these platforms.
As emphasis on advertising grows, customer
acquisition costs grow. The promotions
on marketplace platforms are also painful
operationally, and deep discounting all
the time can be really difficult and really
damaging for your brand and bottom line.”
~ Jeremy Webb
Even now marketplaces demand a percentage of transactions and may charge extra for
certain services and functionality which you can implement as a feature of your own
platform. With D2C, you can remove the middleman and gain an advantage on costs,
savings that you might pass along to your customers.
Beyond the cost of doing business on marketplaces, there are three pillars of long-term
D2C advantage.
Dri vin g Gro wth with D2C
17 D e fining Your Brand t hrough D at a & Experien ceWhoever has the
most direct online
relationships with
your customers
is in a position
to compete with
your brand.
Dri vin g Gro wth with D2C
18 D e fining Your Brand t hrough D at a & Experien ceHow D2C Sets
Brands Apart
3 Pillars Of D2C
Ξ Personalized customer
experiences that help
Advantage
brands stand out with
customers
Ξ Customize your 1. Differentiation
shopping experiences to
your brand and category
D2C enables brands to create richer, more
Ξ Integrate digital
personalized online shopping experiences and,
commerce with social
thus, strengthen your brand differentiation.
media for effective
Relying on marketplaces will make it next to
influencer and brand
impossible to set your brand apart online.
advocates campaigns
Ξ Make any touchpoint “As you grow in the market, you need to find
where your customers real competitive differentiation, and that can be
are connecting created with online service innovations,” says
shoppable Goetsch. “For instance, different applications like
fit finder apps for shoes or loyalty and referral
programs. Your online shopping experience has
to be something unique.”
19Compared to marketplaces, D2C “You must ask yourself, what can you
empowers brands to build more unique provide that others can’t?” advises
experiences in line with their brand identity Bidwale. “Customers buying a commodity
and values. There is no one size fits all product might just be price shopping and
approach to building a differentiated prioritize delivery and speed. For a slightly
digital commerce experience, and brands more premium product, customers might
must base strategies on their specific be willing to pay more to help them make
category and brand perception. the right choice.”
You need to be aware of the nuances of your
customers’ online behaviors and leverage
these experiences to differentiate your
product. This is where D2C has an edge.”
~ Waheed Bidwale
Even a plain white shirt can become a hot item with the right online shopping experience.
On launch day in 2018, Singaporean brand Oxwhite managed to sell 2,500 white shirts in
3 hours, and over 10,000 by the end of the month. How? Oxwhite ran a referral program
on social media that incentivized sharing and reached over 50,000 people in one day. To
encourage conversion, Oxwhite offered a live chat feature on their website and a 365-
day return policy to assuage concerns about fit purchasing a shirt online.18
D2C also offers brands in Southeast Asia the ability to cater to category influencers and
brand advocates with more exclusive experiences and offerings.
18
https://www.brand360.com.my/case-study/oxwhite-online-marketing/
Dri vin g Gro wth with D2C
20 D e fining Your Brand t hrough D at a & Experien ceOne of the advantages of the aforementioned D2C effort by Perfect Diary in China
was their winning social commerce strategy on WeChat. WeChat Mini Programs allows
brands to build their own apps to engage directly with customers within the social network.
Perfect Diary leveraged this feature, along with AI and community-driven customer
service, to create community groups. Perfect Diary created legions of brand advocates
with exclusive releases and promotions that catalyzed organic sharing and reduced new
customer acquisition costs.19
More recently, another Chinese beauty brand Forest Cabin responded to the pandemic
by retraining staff at their stores to start livestreaming promotions and skincare tips. In
February 2021, they had 100 beauty advisors broadcasting, which resulted in a rise in
sales by 45% year on year in the first half of February.20
Selling online through social media is just one possibility.
Building a strong D2C system gives you the advantage of being able to create an online
shopping experience anywhere your customers are connecting.
“With D2C, your backend functionality for online shopping can be injected into any digital
front end,” says Goetsch. “That means you can do things like add a shopping cart or
execute a promotion across a wide variety of online platforms. Your website is the most
traditional channel, but you can also sell on apps or use your backend API for social selling
and sell products directly from Instagram.”
With D2C there are many possibilities for your brand’s online shopping experience. But
in order to craft an effective strategy and continuously react to changing customer
preferences, you need customer data. Fortunately, providing you with customer data is
another pillar of D2C advantage.
19
https://marketingtochina.com/perfect-diarys-successful-strategy-on-wechat/
https://jingdaily.com/china-perfect-diary-ipo-c-beauty/
20
https://news.cgtn.com/news/2020-03-25/Livestreaming-transformed-the-beauty-industry-with-new-
experience-P9ojoA62pq/index.html
Dri vin g Gro wth with D2C
21 D e fining Your Brand t hrough D at a & Experien ceIn the future,
online shopping
experiences could
be as important to
customers as your
products.
Dri vin g Gro wth with D2C
22 D e fining Your Brand t hrough D at a & Experien ceHow D2C
Harnesses The 2. Data
Power Of Data
If you are relying on third parties for digital
Ξ Gain intimate commerce, then you are also giving them
knowledge of your ownership of your customer data. With D2C
customers and brands own their own customer data, which will
invaluable insights to be a crucial asset to drive innovation and market
drive your innovation advantage. The more customer data you have,
strategy the better you can make your brand experience.
Ξ Design customer
“Data ecosystems are what brands need to think
experiences with a data-
about,” says Bidiwale. “Don’t just look at moving
driven edge
people from physical stores to online shopping.
Ξ Giving data away to Every click leads to some kind of data, and brands
marketplaces could need to be aware of the possibilities of data to
empower competitors optimize shopping experiences.”
with insights about your
customers Whoever controls customers’ data will be able to
innovate more effectively to meet their needs.
Ξ Acquiring data from It’s important to ensure that other parties are not
third parties will gaining a foothold to eventually erode your brand
become more limited value by leveraging your customer data.
with increasing privacy
concerns “On marketplaces, you might be happy with
the sales volume, but how much about your
Ξ Customers are more
customers is known to you?” asks Bidiwale.
likely to willingly share
“Marketplaces own the data. Alibaba knows so
data when they get
much about your customers, what’s to stop them
a better shopping
from launching a competing brand in the same
experience in return
category? Facebook and Google own the data,
and you depend on those platforms for marketing.
23My recommendation is to take back control
and build your own data ecosystem for
analysis and optimization. That’s the most
compelling argument for D2C.”
~ Waheed Bidwale
Even if you want to continue purchasing “Brands need to be aware of changes
customer data from outside sources, made by networks and the likes of Apple
that option might be more limited in the to their privacy policies,” says Till. “Brands
future. Data protection and consumer will likely be significantly limited in their
privacy regulations have been gaining ability to access data which was available
increasing traction in recent years, such through mobile ad targeting networks.”
as the European Union’s General Data
Protection Regulation (GDPR). Stricter And yet, when the value exchange is right,
data security and privacy standards will customers are more than willing to share
make it more difficult to collect customer their data.
data without their consent. For instance,
Google has announced plans to phase out
third-party cookie on Chrome browsers 91% of consumers are
by 2022 and that they won’t be building more likely to shop with
“alternate identifiers to track individuals brands who recognize,
as they browse across the web, nor will we
remember and provide
use them in our products.”
relevant, targeted
communications according
to a global survey.22
22
https://www.accenture.com/_acnmedia/pdf-83/accenture-making-personal.pdf
Dri vin g Gro wth with D2C
24 D e fining Your Brand t hrough D at a & Experien ce“There’s a balance between privacy and personalization,” says Bidiwale. “Customers today
expect that the next time they visit your online store they get a much more personal
experience based on what they browsed. They want you to help them make decisions.”
In this context, D2C offers you a platform where customers might be more inclined
to choose to share their data with you because of the service value that you provide
in return. Even if D2C represents a fraction of your total sales, these transactions can
provide you with invaluable data-driven customer insights. When a customer visits your
D2C channel, you will know how they browse, and what content they consume. Then you
can activate based on what you learn.
“And not just in that particular online store — the data you acquire will help you throughout
the funnel, including direct paid communications,” says Webb. “You can use what you
learn in D2C to increase efficiency in other sales channels as well, even on the Lazadas
and Shopees of the world. You can collect data on third party platforms to an extent, but
there you have less control and less ownership.”
D2C is one of the big strategic bets for Reckitt Benkiser across our
business units- as it is the only channel where we truly own the
customer relationship & data end-to-end. It provides us with quicker,
richer, faster insight into what our consumers prefer makes us more
agile than ever before. With the changes coming in 2022 with cookie
deprecation, having first party data will be absolutely central to any
brand looking to keep its digital marketing efficient - D2C is a critical
enabler of this impacting our entire business.”
~ Harsh Shah
Head of e-Commerce, New Categories, Reckitt Benckiser
Access to customer data still requires the ability to act on it effectively. Not every brand
has the organizational capacity to leverage customer data and increase their competitive
edge. The question is, do you want to be one of them? That brings us to the third pillar of
D2C advantage, driving transformation.
Dri vin g Gro wth with D2C
25 D e fining Your Brand t hrough D at a & Experien ceOnly some brands can
leverage customer
data to increase their
competitive edge.
Your brand can be
one of them.
Dri vin g Gro wth with D2C
26 D e fining Your Brand t hrough D at a & Experien ceHow D2C
Catalyzes Change
Step By Step
3. Drive
Transformation
Ξ Make data and
technology the priority
for your organization Even with access to customer data, if you cannot
be flexible adapting to new touchpoints and
Ξ Integrate your digital
changing market conditions, then you could lose
commerce team with
out on sales opportunities.
people from across all
functions
To get the most out of D2C, technology and data
Ξ Adopt an agile need to be the priority for your organization. You
management system to need to develop the ability to control and quickly
lead small microservices change the customer journey online. For most
teams in parallel brands in Southeast Asia, the change will take
time.
Ξ Recruit top tech talent
with a growth mindset A successful implementation requires just as
to roll out new functions much organizational change as technology
change. But reorganizing now will equip you to
Ξ Implement a “headless”
keep up with your customers in the future.
commerce system
where your backend
“There’s clear delineation between the old
digital commerce API
world and the new world of digital commerce,”
will work with endless
says Goetsch. “It’s time to modernize your
user touchpoints or
legacy platforms for a world where teams have
“heads”
to innovate quickly. In the old world, solutions
were released once a quarter. If you look at
Amazon, they are releasing to production once
every second.”
27One of the advantages of D2C is the ability to
roll out new services and functions very quickly.
To do so requires a commerce architecture
where the frontend or user interface is separate
from the backend commerce functionality.
Companies can improve their customer
experiences and roll out new offerings much
faster when they do not have to make time-
consuming and complex backend system
changes. This approach of decoupling backend
API and frontend user interfaces is called
“headless” commerce.
Going headless gives companies maximum
flexibility and control no matter the device
or channel to provide personalized shopping
experiences and make every moment
shoppable. Plus, companies can easily add
new touchpoints when they are ready, such as
social channels, kiosks and mobile apps.
D2C also gives brands the opportunity to adopt
new technologies like artificial intelligence,
chatbots and machine learning to optimize
customer experiences.
“Using data and AI, brands can communicate
directly with the consumer via the consumer’s
preferred channel instantly responding to
questions, updates to existing orders and
placing of new purchases,” says Till. “We can
understand and target the right message to the
right audience.”
Dri vin g Gro wth with D2C
28 D e fining Your Brand t hrough D at a
& E xper ie nc eA nimble D2C system also allows new quickly. One of the most critical areas to
third-parties or partners to come into focus on is project management. Effective
the solution without impacting other project managers can be a driving force
teams’ development pipelines. Common in the success of D2C.
examples are enhancement to customer
communications, third-party tagging Managing D2C demands an agile
and promotions and more tactical approach to project management. An
integrations, such as tax or payments. agile project manager works very closely
with top management for strategic
Digital transformation means architectural decision making, but they must be able to
transformation, often starting with the be individually responsible for successful
move to cloud-based solutions which implementation. Teams need to be able
allow for rapid iteration and multiple to take small, iterative steps and build
deployments daily. To achieve this, quick prototypes to ensure that you can
companies need to build up their tech capture insights as early as possible and
teams with top talent – employees with make better decisions going forward.
a growth mindset and the ability to react
Dri vin g Gro wth with D2C
29 D e fining Your Brand t hrough D at a & Experien ceThat means creating smaller teams with a sharper focus on microservices that can do
many deployments without the risk of changing too much in your system.
Your digital commerce team will also need to include people from across all competencies
in your company. As the people who will ultimately be using the solution, it’s important
that they have direct influence on the requirements set out at the start. Let them test
early on and become “super-users” right from the beginning.
What does your digital commerce department look like today? Digital commerce teams
in the region often lack the right capabilities for success and are not well integrated with
the rest of the company.
These competencies can be added through partnerships, but even so the talent pool in
the region is small.
It can be a significant barrier to find
the right people or partners to develop
marketing and commerce strategy, advise
on a D2C technology blueprint for
strategic success, develop solutions, and
run operations and solutions that can
adapt quickly to changing technology and
consumer demand.”
~ Tim Till
Dri vin g Gro wth with D2C
30 D e fining Your Brand t hrough D at a & Experien ceSome examples For example, Bangkok-based fashion brand
Pomelo has grown to become Southeast Asia’s
of capabilities largest omnichannel fashion retailer.23 Pomelo
that brands need considers itself a digitally native, vertically
to succeed in integrated brand.24 Capabilities they have
implemented include deferred deep linking, app
D2C are: tracking, channel attribution, data management
and event tracking. Their systems platforms are
Ξ Agile organizational
structure to ensure all integrated with each other, which enables
optimal efficiencies them to deep link, build and track personalized
marketing strategies.25
Ξ Strategy skill sets to
define goals and identify
“We start with the customer and we start with
gaps in your ability to
technology and we start with digital,” says David
execute
Jou, Co-founder and CEO of Pomelo. “Our
Ξ Digital marketing strategy competitors start with their brand, then they
and capabilities focus on the offline experience, and marketing is
the primary way of reaching their customers.
Ξ Customer service
So hopefully, we are more engaged, more relevant
capability to delight the
customer through the
and more focused on each and every one of our
lifecycle customers.” 26
Ξ Operations to efficiently Building your company’s D2C capability is
run D2C with a great
about more than D2C. It is about becoming
customer experience
faster, better and more insightful when creating
Ξ Research and customer experiences.
development teams and
processes to design and 23
https://medium.com/jungle-ventures/5-learnings-
build D2C from-seast-asias-largest-fashion-eCommerce-founder-
66661d76c060
24
https://www.techinasia.com/talk/ama-david-jou-pomelo-
Ξ Innovation capabilities and
fashion#qa
processes to execute at 25
https://blog.branch.io/how-online-fashion-brand-pomelo-
the speed of the customer enhances-its-digital-experience-an-interview-with-pomelo-
cmo-jean-thomas/
26
https://www.techinasia.com/talk/ama-david-jou-pomelo-
fashion#qa
31If your brand is
leading today
but not leading
customer experience
innovation, then you
could be caught by
surprise and sooner
than you think.
Dri vin g Gro wth with D2C
32 D e fining Your Brand t hrough D at a & Experien ceMore Direct, More Intimate,
More Valuable Customer
Relationships
How intimately do you want to understand your customers? How personal do you want
their brand experience to be? How much will you control how your customers interact
with your brand online?
The advantages of going D2C cannot be evaluated only by looking at gains next quarter
of even next year. It is more than a tactic to generate sales.
Relying on middlemen online is a recipe for
business failure. Without direct connections
you will become a commodity vendor
racing to the bottom on price. Brands need
to invest in a lifelong brand experience, to
engage directly and sell directly.”
~ Kelly Goetsch
D2C gives brands a long-term edge by placing customer-centric innovation at the heart
of how your company operates. Adopting a D2C strategy now will make sure your brand
keeps control of your customer data and customers experience. Holding off only imperils
your brand’s future.
Dri vin g Gro wth with D2C
33 D e fining Your Brand t hrough D at a & Experien ceTo learn more about how your
business can better engage
with your customers with
D2C, please contact:
Daniel Beach
Strategic Alliance Director, APAC
daniel.beach@verticurl.com
Natalie Lyall
Head of Go to Market, Asia
natalie.lyall@ogilvy.com
Joshua Emblin
Territory Director, APAC
joshua.emblin@commercetools.com
Dri vin g Gro wth with D2C
34 D e fining Your Brand t hrough D at a & Experien ceYou can also read
